Working Paper: NBER ID: w3360
Authors: Michael Woodford
Abstract: These lectures comment upon recent theoretical models of endogenous fluctuations in economic dynamics, including both the literature on nonlinear deterministic cycles arid the literature on "sunspot equilibria". Two important themes include (1) reasons to be interested in models of purely endogenous fluctuations, even though actual economics are admittedly subject to exogenous stochastic shocks; and (2) the importance of market imperfections in making possible equilibria characterized by endogenous fluctuations of either of the two types.
Keywords: endogenous fluctuations; economic dynamics; market imperfections; optimizing behavior
JEL Codes: E32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| optimizing behavior of economic agents (D01) | stability of equilibria (C62) |
| market imperfections (D43) | endogenous fluctuations (E32) |
| endogenous fluctuations (E32) | persistent variability in economic indicators (E32) |
| interactions of predetermined and non-predetermined endogenous variables (C51) | endogenous fluctuations (E32) |
| expectations and market conditions (D84) | endogenous fluctuations (E32) |
| sunspot variables (C29) | endogenous fluctuations (E32) |